A federal judge on Friday denied an Illinois casino company's motion to dismiss a proposed class action from former employees who allege they were cheated out of tens of millions of dollars in a series of multimillion-dollar transactions involving their retirement plan that violated the Employee Retirement Income Security Act.
U.S. District Judge David W. Dugan wrote in a memorandum and order that the proposed class, led by former Casino Queen employees and employee stock ownership plan participants Tom Hensiek and Jason Gill, had adequately pled their case against Casino Queen's holding company board of directors and the Casino Queen ESOP's administrative committee.
The riverboat casino company, Casino Queen, moved on land in 2007 and suffered a series of financial difficulties as the company's investors tried and failed to sell the company. Eventually, the company created a parent called CQ Holding Co. Inc. to structure an ESOP deal subject to the ERISA lawsuit.
The ruling means Casino Queen executives will have to face claims from the former employees, first alleged in a complaint filed in April 2020, that they mismanaged the ESOP in breach of their fiduciary duty under ERISA, including by structuring a deal in which the ESOP severely overpaid for the casino holding company's stock in a $170 million purchase in 2012.
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